PLAY STATION WANTS ITS HOUSE OF CARDS: When Netflix introduced its prestige drama House of Cards early last year to great acclaim and buzz, it turned out to be the best and worst thing to happen to the online video business. The industry realized that Americans were ready to watch quality content online…and it also highlighted the fact that nothing else being churned out by other Web video companies was on that quality level. Since then Amazon.com Inc.’s Prime service has introduced Alpha House, which arguably deserves the same plaudits. Another video contender who many expect to play in the quality realm is Xbox, which has hired former CBS executive Nancy Tellem to oversee a new studio, and recently brought on former WB CEO Jordan Levin. But as Xbox has been fairly quiet (its only announced show is a documentary about the digital revolution) a surprise contender may be emerging: Sony PlayStation. The gaming console is planning to launch Powers, a one-hour supernatural drama series based on a graphic novel that will be produced by the in-house studio, Sony Pictures Television, WSJ reports. It seems that Sony has noticed the massive audience AMC’s The Walking Dead attracts each week, and sees a show like Powers as a way to sell more PlayStations (Sony has even hired some of the team behind Walking Dead to work on the show). The overarching goal is probably to better position PlayStation as the anchor of the digital living room…something that Xbox has been more adept at to date. That potentially opens up more opportunities for advertising, commerce, and who knows, an over-the-top cable service of some kind?

TWITTER TV: Everything you ever wanted to know about Twitter but were afraid to ask has been in the business media in recent days, since last week’s initial public offering filing by the social media outlet. The WSJ looks at how different firms are mining data generated by Twitter for insights into various trends, while both the WSJ and NYT look at a new Nielsen measure which ranks TV programs by their reach on Twitter. As the WSJ notes, that’s a very different list from Nielsen’s traditional ranking of the most watched TV shows. Shows such as “Big Bang Theory” are among the most popular shows on television but don’t have a big presence on Twitter. Read More »

When you have a cash cow as abundant as Microsoft’s Office and Windows software lines, it becomes much easier to drop a billion or two dollars on experiments elsewhere. But in the sunset years of the PC era, Microsoft’s missteps in new ventures are attracting a more skeptical response from shareholders.

Case in point: After an 11% stock slide today, Microsoft is now worth about $32 billion less than it was before it released a grim set of financial results on Thursday. To put that in context, Microsoft has lost almost as much value as all of LinkedIn and Nokia combined.

One struggle was particularly obvious yesterday: Disastrous sales of the company’s Surface RT tablet, which was released in early 2013 and has hardly been seen in the wild since. Seriously: Can you remember the last time you saw somebody using a Surface?

Sales numbers have not been disclosed, but they must be grim: Microsoft said it would take a $900 million dollar writedown on unsold Surface tablets, essentially admitting its stockpiles are worth much less than it had previously believed. If the Surface fails to take off, it could be an expensive misstep for Microsoft, but it could also suggest the company lacks what it takes to become a front-and-center player in the next era of computing.

While the $900 million dollar write-down hurt, it was far from the most significant hit the company has taken in pursuit of lucrative new markets.

Microsoft veteran Julie Larson-Green has been with the company since the Windows 3.1 days of 1993, and after the management reshuffle announced today, she will be the head of the company’s hardware unit.

It’s a relatively small part of the business, responsible for less than 10% of the company’s revenues. But it’s high-profile part, pushing out products like the Xbox and the Surface tablet. Both earn small change compared to Office software, but get plenty of public attention relative to the money involved, playing a big part in defining the image of the new Microsoft.

So what’s worth knowing about Ms. Larson-Green? A few things that stuck out to us, after the jump… Read More »

When Zynga announced yesterday that it had snared Don Mattrick as its new CEO, it was bad news for Microsoft, which had been counting on the Xbox unit chief to see the company through the launch of its new gaming console later this year.

Some said the move caught Microsoft off guard, at a particularly sensitive time. “Just days before the company planned to announce a massive reorganization and months before the release of Xbox One, there was no contingency plan for Mattrick’s departure–a sign that almost no one had a clue,” wrote Fast Company.

But there might be one more company losing out with Mr. Mattrick’s move to Zynga, according to a note today from analysts at Wedbush – more on this after the jump… Read More »

Anyone who did the bulk of their gaming in the Super Nintendo era would find much of today’s console market a bit tough to comprehend. Remember four kids sitting on a living room floor passing around two controllers? Those days are long gone, replaced by cinematic extravaganzas designed to be played alone, or against online adversaries. Mario Kart they are not.

But here’s a more subtle change coming up in Microsoft’s next-generation console, the Xbox One: No longer will video games be like books or old-fashioned music CDs, self-contained content that works anywhere, anytime, and can be resold or lent to any of your friends. Xbox One games are part physical disc, part online service, and tightly controlled both my Microsoft and the game publisher.

ESPN CUTS: ESPN is cutting several hundred jobs, in a rare sign that the TV sports juggernaut is susceptible to the higher fees it pays to air games, as well as other industry changes. WSJ reports that industry consolidation means ESPN needs fewer staff dedicated to dealing with cable operators—one reason why ESPN closed its Denver office. And consider the fact that ESPN’s operating expenses rose 9% to more than $5 billion in the second half of 2012, due in part to the rising costs of carrying college football, NFL and NBA programming, the company said. The Los Angeles Times notes that the staff reductions come just a week after ESPN assured advertisers at its upfront presentation about its strength and said it wasn’t worried about competition from Fox Sports. More from Deadspin, which was first to report the news and has emails from those dismissed Tuesday.

NEW XBOX:Microsoft unveiled a new version of the Xbox, replete with new bells and whistles like an advanced motion and voice-control system and new television functions aimed at keeping up with changing viewer habits. This is the first time Microsoft has updated the Xbox in eight years, WSJ notes, and the timing is ripe: Competitors have encroached on the space with a slew of new and often cheaply priced games. More in the full post. Read More »

Analysts at Griffin Securities conducted a handy piece of research on Microsoft recently: scanning the company’s careers websites and analyzing the details of the more than 2,000 jobs on offer. What kind of people Microsoft is hiring, and the words the company uses in its advertisements, can give a useful early warning on the kind of projects it is putting more (and less) effort into.

What did they come up with? Here’s a few intriguing details:

- Expect much better streaming video services in the next-generation Xbox console, expected to be out later this year. “A combination keyword search of ‘streaming video’ and ‘Xbox’ yielded four dozen open positions,” Griffin wrote. Hooking up televisions to the world of the internet is still a fragmented market and one that nobody seems to have totally cracked yet, and it looks like Microsoft wants to make sure its next Xbox is competitive with all the other streaming media boxes out there.

- Microsoft has four times as many jobs available in Germany (136) than France (33). In fact, Microsoft has more openings in Israel (39) than all of France.

- No advertisements could be found for hardware-related jobs in the Windows Phone division, “an interesting result if Microsoft had chosen to develop a branded phone,” Griffin wrote.

- Search is still a big focus for new talent: there were 249 job openings working on the Bing search engine, compared to 66 for Office (and no search results at all for Mac Office).

No jobs, of course, for Windows XP — still on 39% of computers — as the decade-old operating system is set to be summarily executed next year.

Right, that was a long time ago, when Microsoft was cool and the Rolling Stones, whose song “Start Me Up” was the Windows 95 anthem, still toured regularly.

Microsoft Corp. today is launching a new effort to be relevant in the online music business after years of lagging behind Apple. This time, Microsoft plans to offer a service called Xbox Music, which will stream music for free, at least for a while. As the WSJ’s Ian Sherr points out today on the Digits blog, the Xbox Music service has some important caveats, including that it will only work on computers and tablets running Windows 8 and Windows RT, the latest editions of the Windows operating system franchise.

The new music service is part of a much broader effort to convince consumers and investors that after dominating the personal computer era, Microsoft still has mojo enough to avoid the fate other once-dominant companies suffered when they failed to change as fast as their environment.

Microsoft is a long way from the life-threatening malaise that sank those symbols of corporate dinosaur syndrome, IBM Corp. in the 1990s or General Motors Co. in the 2000s. Microsoft’s market capitalization may have fallen behind Google Inc. for a time last week, and is currently less than half of Apple’s $590 billion market value. But at $246 billion (as of this morning), Microsoft is still worth more than IBM – and is several times more valuable than GM. Microsoft also has $60 billion in the bank, and rakes in more every day.

Still, as the WSJ’s Don Clark (who covered the Windows 95 launch) tells Corporate Intelligence, Microsoft hasn’t had much luck of late fielding products that inspire the kind of consumer lust that the iPad or iPhone do.

Read further for an explanation of the larger strategic challenge Microsoft faces. Read More »